In this article, we will take a look at 13 Best AI Stocks to Buy Under $20.

Artificial intelligence has been a major part of investment strategies over the past two years. It’s one of the reasons the overall equity market has rallied to record highs, driven by solid gains in tech-heavyweights. While the S&P 500 is highly diverse, it’s increasingly becoming an AI index, with five companies accounting for about 30% of its weight.

While focus for the longest time has been on tech giants spearheading the AI revolution, Trivariate Research founder Adam Parker insists that investors are rethinking their backup plan. That’s because most counters are trading at historical highs on valuations getting out of hand amid the AI boom.

Questions about whether the AI boom could turn into a bubble underscore the need to diversify into investment plans trading at highly discounted valuations. Mohamed El-Erian, Allianz chief economic advisor, has already called it a ‘rational bubble’.

“At the end of the day, there are just going to be a few winners, a handful of winners, and therefore some of the investment will result in tears,” El-Erian said in an interview with CNBC’s Squawk Box.

On the other hand, a Bank of America Global Fund Managers Survey has identified the AI bubble as the biggest tail risk to markets. The survey, which polled 166 fund managers overseeing assets worth $400 billion, indicates that a third are wary of an AI bubble.

Bank of America strategists have already noted in a report that “positioning shows investors see returns outweighing risks,” around AI stocks. Nevertheless, the risks of AI stock bubbles are not enough to dampen investor sentiment.

“Concerns around an AI bubble have increased, rising to the #1 market tail risk, but not by enough to dampen a more positive equity market outlook overall,” BoA strategists said.

Amid AI bubble uncertainties, there are still stocks trading at a discount amid premium valuation concerns in the overall market. With that in mind, let’s look at the best AI stocks to buy under $20.

Our Methodology

To curate the list of the 13 Best AI Stocks to Buy Under $20, we scanned ETFs and other online sources for companies with significant exposure to artificial intelligence technology. We settled on AI stocks trading for less than $20 (as of October 24) and that are popular among elite hedge funds. Finally, we ranked the stocks in ascending order by the number of hedge funds holding stakes in them in Q2 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

Best AI Stocks to Buy Under $20

13. Veritone Inc. (NASDAQ:VERI)

Share Price: $6.14

Number of Hedge Fund Holders: 4

Veritone Inc. (NASDAQ:VERI) is one of the best AI stocks to buy under $20. On October 23, analysts at Needham initiated coverage of Veritone Inc. (NASDAQ:VERI) with a ‘Buy’ rating and a $10 price target. The buy rating comes on the heels of strong momentum, with the stock rallying 180% over the past six months.

Consequently, the research firm expects the stock to continue outperforming the overall market, driven by growth in various segments as it pursues targeted market opportunities. The momentum should be driven by growth in the aiWARE, the company’s open AI platform that allows customers to transform unstructured data into structured business outcomes.

Additionally, Needham expects Veritone to benefit from growth in the AI data training market, Public Sector application sales, and aiWARE platform sales across various end markets.

Veritone Inc. (NASDAQ:VERI) is an enterprise AI company that develops software and services to transform unstructured data, such as audio and video, into actionable intelligence. Its core platform, aiWARE, is an AI operating system that orchestrates various AI models to automate tasks and improve efficiency for industries such as media and entertainment, public sector, legal, and talent acquisition.

12. Spectral AI Inc. (NASDAQ:MDAI)

Share Price: $2.22

Number of Hedge Fund Holders: 7

Spectral AI Inc. (NASDAQ:MDAI) is one of the best AI stocks to buy under $20. On October 23, the company announced the pricing of a $7.6 million offering to bolster its balance sheet. The raising of additional capital should help support the expansion and development of the company’s DeepView System.

In the offering, the company is to issue 4 million shares of common stock at $1.90 per share and corresponding warrants at $2.51 per share. The capital injection will help broaden the company’s clinical indications and prepare it for commercial readiness in 2026.

“This financing ensures that we can continue to develop and expand the DeepView System’s clinical indications and prepare for commercial readiness in 2026. We remain fully committed to supporting our current BARDA Project BioShield (PBS) contract, while also advancing our AI-powered technology to broaden our product offerings and deliver innovative solutions to the global medical community,” said J. Michael DiMaio, MD, Chairman of the Board of Spectral AI.

Spectral AI Inc. (NASDAQ:MDAI) is a medical diagnostics company that uses artificial intelligence (AI) and multispectral imaging to assess the healing potential of wounds. The company’s technology helps clinicians make faster and more accurate treatment decisions for patients with burns and diabetic foot ulcers.

11. Rezolve AI PLC (NASDAQ:RZLV)

Share Price: $4.44

Number of Hedge Fund Holders: 8

Rezolve AI PLC (NASDAQ:RZLV) is one of the best AI stocks to buy under $20. On October 22, Rezolve AI PLC (NASDAQ:RZLV) confirmed a series of senior management changes as it seeks to sharpen operational execution and accelerate revenue growth. The management changes will also help enhance the company’s leadership in artificial intelligence and digital commerce.

Consequently, it confirmed the appointment of Arthur Yao as Chief Operating and Financial Officer, tasked with overseeing global operations and finance. Roland Gossage is to assume a new role as Chief Growth Officer, tasked with bridging innovation and market opportunity to ensure the company’s product line evolves.

Richard Burchill is to take over as Group Finance Director, tasked with enhancing the company’s financial performance, reporting, and planning. Crispin Lowery will operate as Chief Revenue Officer, tasked with building a world-class global sales network by energizing regional teams and expanding enterprise reach.

“Rezolve is entering its most exciting chapter yet. These leadership appointments align our organization for scale, discipline, and innovation as we continue to deliver against our growth ambitions. Each of these leaders brings proven capability and deep experience together, they make Rezolve stronger, faster, and more focused than ever,” Daniel M. Wagner, Founder and CEO of Rezolve AI, commented.

Previously on October 13, Roth MKM reaffirmed its Buy rating on the stock, slightly adjusting its price target from $12.50 to $12.40. The updated forecast reflects a potential upside of 187.04%, signaling continued confidence in the company’s growth prospects.

Rezolve AI PLC (NASDAQ:RZLV) is a global leader in AI-driven commerce that provides retailers and brands with technology to power their search, personalization, and checkout experiences. Its “Brain Suite” is an enterprise AI platform that helps businesses create more efficient, personalized customer journeys —from discovery to instant one-tap checkout across multiple channels.

10. Lantronix, Inc. (NASDAQ:LTRX)

Share Price: $4.74

Number of Hedge Fund Holders: 9

Lantronix Inc. (NASDAQ:LTRX) is one of the best AI stocks to buy under $20. On October 20, the company entered into a strategic partnership with Vodafone IoT to come up with a platform that helps businesses optimize performance and unlock recurring revenue opportunities

The two companies are set to launch Kompress.ai, an AI-powered subscription platform targeting the industrial air compressor market. The brand-agnostic AI-powered subscription platform is designed to transform the $27 billion global industrial air compressor market by cutting costs and reducing downtime.

Kompress.ai also combines Lantronix’s Edge hardware and cloud intelligence with Vodafone’s global IoT connectivity. Consequently, it should enable real-time insights and automation for compressor fleets. With AI-powered optimization, operators should be able to meet operational and environmental performance goals.

“Kompress.ai by Lantronix is a scalable SaaS solution designed to generate long-term, high-margin recurring revenue while addressing urgent market needs in industrial efficiency and sustainability,” said Mathi Gurusamy, Chief Strategy Officer at Lantronix. “This platform expands our total addressable market and aligns with global energy and ESG trends that are reshaping enterprise purchasing priorities.”

Lantronix Inc. (NASDAQ:LTRX) is a global provider of Edge AI and Industrial IoT solutions, offering a range of hardware, software, and engineering services to enable intelligent, secure, and connected devices. Their products and services are used by businesses to develop and manage connected products across industries such as smart cities, automotive, and enterprise, facilitating secure remote management and high-speed connectivity.

9. Vuzix Corp (NASDAQ:VUZI)

Share Price: $3.61

Number of Hedge Fund Holders: 9

Vuzix Corp (NASDAQ:VUZI) is one of the best AI stocks to buy under $20. On October 2, Vuzix Corp (NASDAQ:VUZI) entered into a strategic partnership with BUNDLAR, a no-code augmented reality content management system (CMS) platform.

The two are coming together to capitalize on global demand for extended reality solutions across enterprise and government markets. The partnership paves the way for enterprises to leverage BUNDLAR’s Knowledge Now platform to create, manage, and publish immersive XR content directly to Vuzix smart glasses.

“This partnership is about closing the XR ecosystem gap,” said Lewis Gardner, CTO of BUNDLAR. “Vuzix delivers world-class wearable hardware, and BUNDLAR brings the no-code content management layer that makes it practical to create, update, and deploy immersive experiences in seconds. Together, we’re enabling scalable adoption that can drive significant revenue growth in both commercial and defense markets.”

Pairing BUNDLAR’s no-code platform with Vuzix’s leading smart glasses will deliver an end-to-end XR solution that is easy to deploy. It is also expected to enhance Vuzix’s competitive position as it expands across markets where efficiency, safety, and scalability are crucial.

Vuzix Corp (NASDAQ:VUZI) integrates AI into its augmented reality (AR) smart glasses to provide hands-free, real-time assistance for frontline workers in various industries. The AI capabilities are primarily delivered through software from Vuzix’s partners, which leverage the company’s devices for computer vision and processing.

8. Airship AI Holdings Inc. (NASDAQ:AISP)

Share Price: $5.01

Number of Hedge Fund Holders: 10

Airship AI Holdings Inc. (NASDAQ:AISP) is one of the best AI stocks to buy under $20. On October 6, the company announced it has secured 16 individual contracts from government agencies, including the Department of Justice and the Department of Homeland Security.

The contracts are to leverage Airship’s AI-driven video, sensor, and data management surveillance solutions to enhance public safety and investigative capabilities. The 16 federal contracts underscore demand for the company’s solutions, ranging from advanced edge analytics to datacenter- and cloud-based AI capabilities.

“These awards reflect the continued momentum and critical importance of AI-driven surveillance solutions in advancing public safety and homeland security,” said Paul Allen, President of Airship AI. “As the administration prioritizes strengthening national security, AI is proving to be an essential force multiplier for law enforcement, delivering greater operational efficiency, enhanced accuracy, and improved threat detection, particularly along the border.”

Airship AI Holdings Inc. (NASDAQ:AISP) provides AI-driven surveillance and data management platforms for government, defense, and commercial organizations. Its technology analyzes data from various sources, like video cameras and sensors, to “structure” it by identifying and extracting key information, such as license plates or aircraft tail numbers.

7. Rekor Systems, Inc. (NASDAQ:REKR)

Share Price: $2.65

Number of Hedge Fund Holders: 10

Rekor Systems (NASDAQ:REKR) is one of the best AI stocks to buy under $20. On October 23, Rekor Systems (NASDAQ:REKR) confirmed its entry into the deepfake detection market. It has consequently unveiled a new subsidiary, Rekor Labs, tasked with combining AI and machine vision to identify synthetic video, audio, and images.

The new deepfake technology aims to address the growing legal, personal, and commercial challenges posed by manipulated videos, audio, and images. The technology should enable the company to pursue opportunities in the deepfake detection market, which is expected to surpass $30 billion in the next decade.

“Deepfake fraud has rapidly increased in government security and surveillance, leading to complications for criminal prosecutions, potential fraudulent liability, insurance fraud, and other challenges across our customer base. Working with our customers and leveraging Rekor’s expertise in artificial intelligence and machine vision, our engineering team developed a unique solution to tackle this issue,” said Christopher Kadoch, Chief Science Officer at Rekor.

Rekor Systems (NASDAQ:REKR) develops artificial intelligence (AI) solutions that provide real-time roadway intelligence for public safety, transportation management, and urban mobility. The company uses AI-enabled computer vision and machine learning to collect, connect, and analyze mobility data to help governments and businesses make data-driven decisions.

6. Serve Robotics Inc. (NASDAQ:SERV)

Share Price: $13.74

Number of Hedge Fund Holders: 10

Serve Robotics Inc. (NASDAQ:SERV) is one of the best AI stocks to buy under $20. On October 13, Northland Securities analyst Michael Latimore reiterated his Buy rating on Serve Robotics Inc. (NASDAQ:SERV) and raised the price target from $23 to $26, reflecting increased confidence in the company’s growth prospects.

This decision comes after the company inked a deal to deploy its sidewalk robots to fulfill orders on the food delivery platform DoorDash on October 9.

Customers ordering via DoorDash at select stores and restaurants around Los Angeles could have their orders delivered by a Serve robot thanks to the strategic partnership. Plans are underway to expand the service to other DoorDash deliveries across the US.

The tie-up with DoorDash opens the door for Serve Robotics to increase its volume of orders available for its robots. The move should also help the company capture more customers and expand its reach beyond Uber Eats.

“This partnership enables us to go to cities where DoorDash is the dominant player. Now that we have such a significant fleet size, there’s a very sizeable supply that we can provide to companies… and we’re looking for more demand, so that every minute of every day, the robots have access to more jobs,” said Serve co-founder and CEO Ali Kashani.

Serve Robotics Inc. (NASDAQ:SERV) develops AI-powered, low-emissions robots for last-mile delivery, primarily for food and groceries. The company deploys its autonomous robots on sidewalks to complete deliveries for partners like Uber Eats and 7-Eleven, aiming to make deliveries more sustainable and economical.

5. Palladyne AI Corp (NASDAQ:PDYN)

Share Price: $7.97

Number of Hedge Fund Holders: 11

Palladyne AI Corp (NASDAQ:PDYN) is one of the best AI stocks to buy under $20. On October 21, the company announced it is partnering with Draganfly, a leading developer of drone solutions and systems.

The two are joining forces to enhance the capabilities of Draganfly’s unmanned aerial vehicle (UAV) platforms with Palladyne Pilot AI software. Under the terms of the agreement, Pilot AI software is to be integrated into Draganfly drone systems to enable multiple UAVs to operate as a coordinated team.

The integration will also enable Draganfly platforms to gain expanded mission capabilities, including autonomous swarm operations, real-time intelligence, reconnaissance, and enhanced operator efficiency.

“Palladyne AI is enabling drone platforms to incorporate autonomy features that were even recently limited to large and costly systems,” said Cameron Chell, CEO of Draganfly. “By having Palladyne Pilot as an embedded option into our platforms, we continue to expand our modular framework and increase our adaptable, mission-critical autonomy and swarm capabilities that reduce operator workload and extend the effectiveness of our systems across complex use cases.”

Palladyne AI Corp (NASDAQ:PDYN) develops AI software for robots, enabling them to be more autonomous and adapt in real time without constant cloud connectivity. The company’s platform, Palladyne IQ, allows robots to learn, reason, and act more like humans and is used across industries such as manufacturing, logistics, defense, and aerospace.

4. Stagwell Inc. (NASDAQ:STGW)

Share Price: $4.91

Number of Hedge Fund Holders: 15

Stagwell Inc. (NASDAQ:STGW) is one of the best AI stocks to buy under $20. On October 21, the company launched Agent Cloud, a platform that provides unified access to multiple AI models and marketing assistants.

The platform should offer marketers access to various large language models, including GPT-5 Gemini 2.5 Pro, Claude Sonnet 4, and Grok 4. It will also provide access to AI-powered image and video tools, such as Imagen and Veo3. Agent Cloud is to offer a single secure entry point to the leading AI models.

The platform is designed to address challenges that marketers face in balancing AI innovation with governance and scale by providing a secure entry point to leading AI models. It will also enhance the creation of custom AI assistants that can be shared across organizations.

“Agent Cloud unlocks the full range of what AI tools can do for modern marketers,” says Elspeth Roller, CEO of The Marketing Cloud. “It removes the guesswork and lets your team dive right into the applications and use cases that drive impact. Heading into 2026, it also gives organizations the foundation they need to compete in a world of increasingly more agentic AI.”

Stagwell Inc. (NASDAQ:STGW) is a digital-first marketing and advertising company that uses AI to build and market a suite of software products through its division, The Marketing Cloud, and to power digital transformation services across its network of agencies.

3. BigBear.ai Holdings, Inc. (NYSE:BBAI)

Share Price: $6.78

Number of Hedge Fund Holders: 20

BigBear.ai Holdings Inc. (NYSE:BBAI) is one of the best AI stocks to buy under $20. On October 13, the company entered into a strategic partnership with Tsecond to deliver artificial intelligence-enabled edge infrastructure tailored for the battlefield.

The collaboration will result in the integration of BigBear.ai’s ConductorOS orchestration platform with Tsecond’s BRYCK platform. The integration will enable US national security organizations to deploy AI rapidly and reliably at a tactical edge. The resultant platform will enhance threat detection and decision-making in disconnected or contested environments.

The combined solution will also provide a ready infrastructure that enhances the deployment and management of AI at the tactical edge. Consequently, tactical teams should be able to make faster, more informed decisions about reducing reliance on full connectivity or cloud computing.

“Together with Tsecond as a preferred partner for hardware at the tactical edge, we’re equipping national security teams with the ability to process data within seconds, detect threats sooner, and adapt quickly – even in disconnected environments – for decisive action when it matters, said Kevin McAleenan, CEO of BigBear.ai.

BigBear.ai Holdings Inc. (NYSE:BBAI) is a technology company that provides AI-powered decision intelligence to governments and industries focused on national security and critical infrastructure, operating globally.

2. SES AI Corporation (NYSE:SES)

Share Price: $2.37

Number of Hedge Fund Holders: 20

SES AI Corporation (NYSE:SES) is one of the best AI stocks to buy under $20. On October 14, the company signed a term sheet to establish a joint venture with Hisun New Energy Materials. The two are joining forces to supply electrolyte materials discovered by SES AI’s Molecular Universe.

The company has already discovered several electrolyte materials, including a low-to-medium silicon anode Li-ion electrolyte for EV applications and a Li-Metal electrolyte for drones and eVTOL applications. It has also unveiled Lithium iron phosphate (LFP) Li-ion electrolyte for ESS applications.

The joint venture marks an important milestone in validating the discovered electrolytes. The focus shifts to producing them on a commercial scale. Additionally, the joint venture is expected to create a new recurring revenue source by supplying the discovered materials to customers globally.

We expect this JV to provide us with a new source of recurring revenue and allow us to maintain a capex-light approach by leveraging Hisun’s existing manufacturing capacity to accelerate commercial supply of these AI discoveries,” said Qichao Hu, Founder and CEO of SES AI.

SES AI Corporation (NYSE:SES) develops and manufactures high-performance, artificial intelligence (AI)-enhanced lithium-metal (Li-metal) and lithium-ion (Li-ion) rechargeable batteries. The company leverages AI to improve battery performance, safety, and lifespan across a range of applications, including electric vehicles (EVs), drones, robotics, and energy storage systems.

1. Zeta Global Holdings Corp. (NYSE:ZETA)

Share Price: $19.23

Number of Hedge Fund Holders: 34

Zeta Global Holdings Corp. (NYSE:ZETA) is one of the best AI stocks to buy under $20. On October 10, DA Davidson reaffirmed its Buy rating on Zeta Global Holdings (NYSE: ZETA), maintaining a $27 price target.

The decision followed Zeta’s update on its 2028 financial goals and the launch of its new AI-powered platform, Athena, designed to capitalize on the marketing cloud replacement cycle and rising demand for performance-based advertising. The company’s strong execution was underscored by 40.6% revenue growth and a 60.9% gross profit margin over the past year.

DA Davidson voiced increased confidence in Zeta’s fundamentals and long-term strategy, citing the company’s innovation and positioning at the intersection of digital transformation and AI-driven marketing.

Zeta Global Holdings Corp (NYSE:ZETA) operates a cloud-based omnichannel platform that provides enterprises with consumer intelligence and marketing automation solutions. Its flagship offering, the Zeta Marketing Platform (ZMP), along with integrated AI tools, enables brands to unify customer identities, anticipate behavior, and deliver personalized experiences across channels like email, social media, web, and video.

While we acknowledge the potential of Zeta Global Holdings Corp (NYSE:ZETA) as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than ZETA and that has 100x upside potential, check out our report about this cheapest AI stock.

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